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Intermediate Notes 9:12.docx - Intermediate Accounting I...

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Intermediate Accounting I 9/12/17 Notes: Chapter 2 Overview of Conceptual Framework Must consider 1. Objective of financial reporting 2. Characteristics associated with high quality accounting standards Phases of FASB Framework project 1. Objective and qualitative characteristics 2. Elements and recognition 3. Measurement 4. Reporting equity 5. Presentation and disclosure 6. Framework purpose and status in GAAP 7. Application to nonprofit sector 8. Remaining issues Financial information is relevant if it can make a difference in decision making by exhibiting these attributes: Predictive value: decision makers can use it as an input into processes that help forecast problems Confirmatory value: provides feedback about prior evaluations Materiality: if reporting it inaccurately or omitting it would affect financial user decisions Faithful representation indicted whether financial information depicts the substance of an economic event in a manner that is: Complete: if it includes all information necessary for the financial statement user to understand the underlying economic event Neutral: if it is free from bias in both the selection and presentation of financial data.
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